To record the period-end adjusting entry, we need to account for the office supplies that were used up during the period. Here’s a step-by-step breakdown:
1. Initial Balance of Office Supplies:
The company starts with an initial balance of office supplies worth [tex]$500.
2. Purchases During the Period:
The company buys additional office supplies worth $[/tex]3,000 during the period.
3. Ending Balance of Office Supplies:
By the end of the period, the company has [tex]$750 of office supplies left.
4. Calculating the Used Supplies:
We need to find out how much office supplies were used during the period. The formula for that is:
\[
\text{Used Supplies} = (\text{Initial Balance} + \text{Purchases}) - \text{Ending Balance}
\]
Substituting the values, we get:
\[
\text{Used Supplies} = (500 + 3000) - 750 = 2750
\]
5. Journal Entry for Used Supplies:
- Debits: Office Supplies Expense (to recognize the expense of the supplies used)
- Credits: Office Supplies (to reduce the balance of office supplies)
The journal entry to record the used office supplies at the end of the period is as follows:
\[
\begin{array}{|c|c|c|c|}
\hline \text{Event} & \text{Account Titles and Explanation} & \text{Debit} & \text{Credit} \\
\hline 1 & \text{Office Supplies Expense} & \$[/tex] 2,750 & \\
\hline & \text{Office Supplies} & & \$ 2,750 \\
\hline
\end{array}
\]
This journal entry properly adjusts the accounts to reflect the office supplies used during the period.
